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Fuelcell Energy Shares Charge Higher After Posting 43% Growth in Q3 Revenue

Source: Streetwise Reports   09/14/2021

Shares of Fuelcell Energy Inc. traded 15% higher after the company reported Q3/21 financial results…

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Source: Streetwise Reports   09/14/2021

Shares of Fuelcell Energy Inc. traded 15% higher after the company reported Q3/21 financial results highlighting positive YoY increases in revenue and gross margins driven by a 102% increase in revenues derived from licenses and service agreements.

Integrated fuel cell company FuelCell Energy Inc. (FCEL:NASDAQ), which develops and provides innovative fuel cell technology using its proprietary, state-of-the-art fuel cell platform in order to enable and promote clean energy, today announced financial and operating results for its third quarter 2021 ended July 31, 2021.

Fuelcell Energy's President and CEO Jason Few commented, "FuelCell Energy delivered higher revenue in the third fiscal quarter, both sequentially compared to the second fiscal quarter and year over year. We are pleased by the continued execution of our project backlog and the advancement of our strategic agenda in terms of infrastructure, solutions and talent to support our ability to achieve our long-term goals…We made progress in advancing our inflight projects and combined with an increase in our investment in commercial capabilities and research and development activities, we believe we are positioning FuelCell Energy for long-term growth and sustainable commercial success."

CEO Few continued, "We are almost two years into our Powerhouse business strategy, and we continue to make progress…We recently announced additions to our team, significantly expanding our sales and marketing presence with the goal of enhancing customer engagement and effectiveness."

"We increased our investment in innovation and are making progress towards the availability of our Advanced Technologies solutions, including distributed hydrogen, long duration energy storage, and hydrogen production via our solid oxide platform. These offerings will complement our commercially available carbonate fuel cell platforms that provide a scalable solution to deliver against the increasing requirements of clean, distributed power and hydrogen generation to strengthen and supplement the grid power and enable the hydrogen economy," Few added.

The company reported that revenue in Q3/21 increase d by 43% to $26.8 million, compared to $18.7 million in Q3/20. The firm advised the YoY increase was mainly attributable to a $7.2 million increase in service agreements and license revenues since more module exchanges occurred during the quarter versus the Q3/20. In Q3/21, service agreements and license revenues increased significantly by 102% to $14.3 million, versus $7.1 million in Q3/20.

In addition, the firm grew generation revenues by 32% to $6.2 million in Q3/21, up from $4.7 million in Q3/20. The gains win generation revenues were attributed to a combination of higher operating output of the generation fleet portfolio, investments in maintenance activities and an increase in the overall fleet size.

The company posted a gross profit of $1.1 million in Q3/21, compared to a gross loss of $3.1 million in Q3/20.

Fuelcell Energy posted a lower net loss of $12.0 million in Q3/21, versus a net loss of $15.3 million in Q3/20. The improved totals were due to higher gross margins and lower interest expenses from borrowings under the Orion credit facility.

The firm reported a net loss per share of $0.04 in Q3/21, compared to a net loss of $0.07 per share in Q3/20.

The firm noted that it currently has a strong cash position with cash and cash equivalents on its balance sheet of $494.0 million as of July 31, 2021, compared with $192.1 million on October 31, 2020.

Fuelcell Energy also discussed highlights of recent business activities at the company. The firm stated that "it achieved mechanical completion, executed the interconnect agreement in July, and commenced the process of commissioning the 7.4 MW platform at the U.S. Navy Submarine Base in Groton, Conn." The company is proud that its platforms are able to increase grid stability and support the navy's efforts to fortify its base energy supply with clean reliable power.

The firm noted also that its products were deployed for use in a 1.4 MW platform at a wastewater treatment facility in San Bernardino, Calif. that opened commercially in July 2021.

The company is also progressing with its work at an on-site civil construction of a 7.4 MW project in Yaphank, N.Y. and a 14.8 MW project in Derby, Conn. The Derby site is slated for placement for five of the firm's SureSource 3000 fuel cell systems that will be installed on engineering platforms along the banks of the Housatonic River.

In addition, the company is developing a 2.3 MW trigeneration platform with Toyota at the Port of Long Beach, Calif. The project is currently being designed to produce electricity, hydrogen, and hot water.

FuelCell Energy is a Danbury, Conn.-based provider of sustainable clean energy technologies that are geared toward solving critical challenges pertaining to production and distribution of responsible and sustainable energy. The company uses its proprietary fuel cell technology platforms to offer sustainable products and solutions for businesses, utilities, and government municipalities.

The firm stated that it develops, engineers, deploys, services, and manages turn-key distributed power generation solutions for the entire life of the power plant. The firm's systems can be easily integrated with other intermittent energy sources such as solar and wind turbines.

Fuelcell Energy began the day with a market cap of around $1.8 billion with approximately 322.5 million shares outstanding and a short interest of about 16.1%. FCEL shares opened 10% higher today at $6.20 (+$0.58, +10.32%) over yesterday's $5.62 closing price. The stock has traded today between $6.12 to $7.54 per share and is currently trading at $6.46 (+$0.84, +14.95%).

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Disclosure:
1) Stephen Hytha compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. He or members of his household own securities of the following companies mentioned in the article: None. He or members of his household are paid by the following companies mentioned in this article: None.
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( Companies Mentioned: FCEL:NASDAQ, )

Energy & Critical Metals

LEL reckons its Burke graphite deposit suited for lithium battery applications

Special Report: Lithium Energy’s teamed up with CSIRO for optimisation testwork for its Burke graphite project in Queensland. … Read More
The post…

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Lithium Energy’s teamed up with CSIRO for optimisation testwork for its Burke graphite project in Queensland.

The research agreement with CSIRO covers further testwork, including attempting spheronisation and purification of the natural graphite particles.

Essentially, the graphite is shaped into ‘potato-like’ structures with the objective of easier processing of Burke natural graphite flakes into electrode materials to reduce capacity losses and enhance cell efficiency.

The idea is to demonstrate to potential graphite purchasers the benefits of the natural flake graphite within the deposit.

The project will be 50% funded by the CSIRO Kick-Start Program and is expected to take four months to complete.

Lithium Energy (ASX:LEL) is confident the deposit presents an opportunity to cater to the growth in demand for graphite in lithium-ion batteries.

Encouraging electrical storage capacity

Burke has a JORC inferred mineral resource of 6.3 million tonnes at 16.0% Total Graphitic Carbon (TGC) for 1,000,000 tonnes of contained graphite – including a high-grade component of 2.3 million tonnes at 20.6% TGC.

Its high grade and low impurities make it particularly attractive for use in lithium-ion batteries.

In previous test work, Burke graphite cells had generally higher levels of capacity compared with control coin cells when repeatedly (50 times) charged and discharged over a 10-hour cycle time.

The company considered this electrical storage capacity highly encouraging and it was the driving force to undertake the further testwork required by battery manufacturers looking to acquire graphite for use in their battery manufacturing operations.

Pic: Total Graphite Content (TGC) comparison of ASX listed company graphite projects

Potential offtake partners

The company is planning to re-engage with Chinese and Japanese parties who have previously expressed a strong interest in the graphite from the Burke Project.

Lithium Energy said that companies in China are increasingly looking outside of the country for stable supplies of high-quality graphite concentrate – due to increasing environmental concerns as well as grades being typically lower in the country.

Once the latest round of testwork is complete, the company will pursue discussions with the aim of forming binding commercial off-take and development agreements.

 


 

 

This article was developed in collaboration with Lithium Energy Limited, a Stockhead advertiser at the time of publishing.

 

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.

 

The post LEL reckons its Burke graphite deposit suited for lithium battery applications appeared first on Stockhead.

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Energy & Critical Metals

Power Supply Shock Looms: “Global Markets Will Feel The Pinch Very Soon” Of China’s Next Crisis

Power Supply Shock Looms: "Global Markets Will Feel The Pinch Very Soon" Of China’s Next Crisis

Distracted by the ‘grandness’ of the collapse…

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Power Supply Shock Looms: "Global Markets Will Feel The Pinch Very Soon" Of China's Next Crisis

Distracted by the 'grandness' of the collapse of China's property development market, many have missed the fact that China faces a crisis that could directly hit Asia's economy just as hard as a financial collapse - a nationwide power supply shock.

After ramping up its coal-based power production earlier in the year, it appears Beijing has suddenly grown a conscience over its emissions and the 'average joe' could be about to feel the pain of that decision.

As Bloomberg reports, the crackdown on power consumption is being driven by rising demand for electricity and surging coal and gas prices as well as strict targets from Beijing to cut emissions.

It’s coming first to the country’s mammoth manufacturing industries: from aluminum smelters to textiles producers and soybean processing plants, factories are being ordered to curb activity or - in some instances - shut altogether.

"With market attention now laser-focused on Evergrande and Beijing’s unprecedented curbs on the property sector, another major supply-side shock may have been underestimated or even missed,” Nomura Holding Inc. analysts including Ting Lu warned in a note, predicting China’s economy will shrink this quarter.

As a reminder, China pollutes more than the US and all developed countries combined...

More problematic for Greta and her pals, between the years 2000 and 2020, the amount of electricity generated by burning coal increased more than four-fold in China, hitting around 4,600 terrawatt hours in the past year.

Infographic: China’s Energy Demand Sees Coal and Renewables Soar | Statista

You will find more infographics at Statista

As the scene below suggests, this is not the first time China has faced winter power demand surges (which prompted many to turn to diesel generators to plug the shortages of power from the electricity grid).

However, this year is different.

The danger is that, as Zeng Hao, chief expert at consultancy Shanxi Jinzheng Energy, warns: government policies will significantly limit the energy industry’s potential to increase production to meet the demand increase.

2021's worsening power crunch in China reflects three specific factors:

1) Extremely tight energy supply globally (that's already seen chaos engulf markets in Europe);

2) The economic rebound from COVID lockdowns that has boosted demand from households and businesses (as lower investment by miners and drillers constrains production); and

3) President Xi Jinping tries to ensure blue skies at the Winter Olympics in Beijing next February (showing the international community for the first time that he's serious about de-carbonizing the economy).

Simply put, it is the third factor - which is all of its own making - that has raised the risk of a severe shortage of coal and gas - used to heat homes and power factories - this winter; and more ominously, expectations of the need to ration power to those deemed worthy.

“The power curbs will ripple through and impact global markets,” Nomura’s Ting said.

“Very soon the global markets will feel the pinch of a shortage of supply from textiles, toys to machine parts.”

As we noted earlier in the year, China needs to shutter 600 coal plants to meet its emissions goals of net zero greenhouse emissions by 2060.

If Xi's recent actions in the interests of "common prosperity" are really about forestalling social unrest, we suspect his commitment to meeting self-imposed carbon emissions targets may quickly evaporate as the Chinese people are unlikely to stand sustained black-outs for long without upheaval.

Tyler Durden Sun, 09/26/2021 - 20:30
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Energy & Critical Metals

Which uranium producers are ready to pounce when the price is right?

The uranium price is going gangbusters, and the spot price has punched through $50/lb for first time in nine years. … Read More
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The uranium price is going gangbusters, and the spot price has punched through $50/lb for first time in nine years.

The spark for this price rise is the Sprott Physical Uranium Trust, which used a US$300 million at-the-market equity raise to buy up 28.3 million pounds of uranium in recent weeks.

That’s more than the amount of nuclear fuel required to power France for a year.

And it’s aiming to ramp its buying spree up even further, revealing plans to increase its at-the-market offer limit by US$1 billion to US$1.3 billion.


 

When will the price be right for uranium producers to restart?

Lotus Resources (ASX:LOT) managing director Keith Bowes agrees with the general  consensus that aroundUS$60/lb is the magic number that will justify new operations to start – or to dust off operations like the company’s Kayelekera project in Malawi.

“There’s a common theme with most of the developers in the last two years or so – and you’ll see that when you look their reporting, the scoping studies and feasibility studies – that the mid-60s is a realistic number for development to come back online again,” Bowes said.

“There’s obviously a little bit of flexibility around there, depending how you want to go about your contracting.

“If you could get your initial period at maybe $55 or $60 and know that’s going to grow as you go through your production protocol, that may be something that somebody would have a look at – if you can get the pounds into a contract.”

 

Spot price still has plenty of room to grow

The company doesn’t know when it will look to lock in prices just yet, especially since Bowes reckons there’s still some spot price growth to come.

“There’s been a massive rise because of Sprott coming in, but they’ve only effectively used a very small portion of the $1.3 billion available to them – they’ve probably only used $200 million at the moment,” he said.

“So, there’s still a lot of buying power to come from Sprott and I think we can expect to see the spot price increasing more over the coming months.

“And then you’ll see the term price coming up with that as well.”

The prevailing spot price would influence the starting point of discussions, but it’s just an indicator of the term contract market, where most of the action happens between uranium miners and the utilities.


 

Mothballed projects have a better chance of catching the uranium ride

Kayelekera produced 11Mlbs over five years, ceasing operations in 2014 due to sustained low uranium prices.

And projects that can be restarted quickly are better placed to catch the uranium ride at the peak of the cycle.

“If you have a look at the way the cycle is going at the moment, realistically, you’d expect to reach a peak maybe next year or the year after,” Bowes said.

“And the only company that are really in a position to catch the next cycle are those companies that have got assets that are in care and maintenance and can be brought back on relatively quickly.

“Any of the companies that have got greenfield projects, it’s a 5-to-10 year sort of timeline for them to come into production.

“And I don’t know whether they’d make the cycle this time.”

Not to mention, the cost of restarting a mine is much less than developing one – and Lotus is looking at around US$50 million to recommence production at Kayelekera.
 

Focusing on feasibility study in the meantime

While they’re waiting for the price to peak, Bowes said the company is focusing on having its feasibility study in place.

“We want to have the results from our feasibility study available so we can provide assurance to any utilities that we understand what is required to restart the asset back up again,” he said.

“Our feasibility study will be finished the middle of next year and we would expect to start serious negotiations with utilities after that.

“However, we have already started the process with North American utilities – so those in the US and in Canada – to reintroduce the Kayelekera project to them, and to introduce Lotus as a new company.”

He said because Kayelekera product has been previously sold and processed by utilities in the US and Canada, it’s known to the market – which gives the company an advantage over its peers who are starting from scratch.

But the fact remains that most stocks are years away from even thinking about production.

The current market dynamics are conducive to increased term market contracting activity. Pic: Paladin.

 

Which other uranium producers are waiting in the wings to restart?

Here are the companies like Lotus who have been doing the work quietly in the background before the uranium market exploded – and could potentially pull the trigger on production once the price is right.

 

PALADIN ENERGY (ASX:PDN)

Paladin is a former producer at the Langer Heinrich mine in Namibia which has been on care and maintenance, but – following a big $218 million cap raise earlier this year — is ready to relaunch.

Peak production was 5.6 million pounds in 2014 (2,540t) before operations were suspended due to low prices.

The company’s timetable envisages a restart of production with a modest capital outlay of around $80m once contracts with utilities have been signed.

 

VIMY RESOURCES (ASX:VMY)

Advanced uranium explorer, Vimy, wants its shovel-ready Mulga Rock project up and running to take advantage of the uranium price surge.

It raised $18.5 million this year to advance early works at Mulga Rock in WA and to continue exploration at the Alligator River project in the Northern Territory.

In August the Project Management Plan was approved, with just two WA Government departmental approvals remaining.

“Combined with renewed activity in the term uranium market, this approval augurs well for a project Final Investment Decision in the year ahead,” managing director and CEO Mike Young said.

 

BOSS ENERGY (ASX:BOE)

Boss has just appointed the key EPC contractor for the electrical, instrumentation and control system at its 2.25-million-pound Honeymoon project in South Australia.

CEO Duncan Craib said the company was advancing multiple work streams in parallel to minimise the lead time between FID and the start of production.

“We are making project preparations on several fronts to ensure we can capitalise on the rapidly turning uranium market at the moment of our choosing,” Mr Craib said.

“We are already the most advanced of all the non-producing Australian uranium projects, with a production plant and key infrastructure in place.

“By making these preparations now, we are ensuring Boss is on track to be Australia’s next uranium producer.”

In March, Boss raised $60 million to buy 1.25 million pounds of uranium on the spot market at an average price of US$30.15 per pound – which it says will provide greater flexibility for financing and off-take negotiations.

 

DEEP YELLOW (ASX:DYL)

Deep Yellow has three uranium projects in Namibia – Reptile, Nova and Yellow Dune.

A PFS was completed in early 2021 on its 3 million pound per annum Tumas project – within the Reptile tenements — and a DFS commenced March 2021.

The company raised A$42 million in July to advance feasibility studies on the Reptile project and M&A activities.

 

BANNERMAN RESOURCES (ASX:BMN)

Bannerman’s Etango-8 project — also in Namibia — has been ‘reimagined’ as smaller scale mine initially, but with the ability to ramp up production as demand improves.

In February, it raised $12 million to complete the Pre-Feasibility Study (PFS) at the Etango-8 Project, and is busy with a Definitive Feasibility Study (DFS).

The company says the Etango-8 development pathway will enable it to get into production to benefit from the current uranium cycle – whilst having the option of increasing the production rate in the future to take advantage of deepening forecasted deficits in the uranium market.

 

BERKELEY ENERGIA (ASX:BKY)

Project developer Berkeley Energia (ASX:BKY) is battling through the approvals process to build its contentious Salamanca uranium mine in Spain.

 

PENINSULA ENERGY (ASX:PEN)

This US-based company can get back into production within six months – and for just $US6 million — once a final investment decision is made.

The flagship 3 million pound per annum ‘Lance’ project, located in Wyoming, is the only US-based uranium project authorised to use the industry leading, low-cost, low pH ISR process.

In early September, the company completed a sale of 200,000 pounds of U3O8 pursuant to a long-term contract.

The uranium was sourced from the existing portfolio of binding purchase agreements and a net cash margin of US$3.8 million will be generated from the sale.

 

AURA ENERGY (ASX:AEE)

This long-suspended uranium stock has re-joined the ASX with a bang last week and is focused on the advanced ‘Tiris’ project in Mauritania, which the company calls “one of the most compelling uranium development projects in the world today”.

The company says it has executed an offtake agreement for the project, with financing discussions currently advancing.

Highlights of recent DFS include low start-up costs of $US74.8 million and a low All-In Sustaining Cost (AISC) of US$29.81/lb – well below current prices.

Vanadium by-product recovery may lower costs further, Aura says.

 

At Stockhead we tell it like it is. While Lotus Resources is a Stockhead advertiser, it did not sponsor this article.

The post Which uranium producers are ready to pounce when the price is right? appeared first on Stockhead.

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